shazam beyond the tagging

For the first time since 1999, the music industry has seen a rise in global sales. For years the industry’s decline made it seem like it was coming to an end – unable to create digital business models that could compete with online piracy, the music industry was being destroyed by the start of the digital revolution. Though, this past year is a different story.

Sony Music’s Edgar Berger claims that digital is what’s saving the music industry. Digital revenue continues to grow and in a variety of forms. One particular application that contributes to download stores like iTunes and Amazon MP3 is Shazam. For a while Shazam was seen as just the application that would help you “tag” a song – identify the music playing in the area you were in. After recently announcing a major milestone of 300 million users, the company has become a flourishing business as a result of its branding and marketing strategies. What might these strategies be?

According to The Guardian at Mobile World Congress, TV advertising is becoming the primary revenue stream for this music tagging application. With tens of millions of weekly active users, Shazam is looking to make second-screen ads a big deal for broadcasters. Shazam’s executive vice president of marketing David Jones indicates that its users are currently tagging 10m songs, shows and ads a day. With these tags, users are also tapping through to buy the content from music download stores, bringing in a run-rate of $300M in sales per year. Jones mentioned during an interview with The Guardian that TV shows, films and apps are a small but fast-growing percentage.

Companies that hold big events like the Super Bowl and Grammys in the US are creating innovative ways through Shazam and other applications involving media to spread brand awareness. For instance – Shazam creates what Jones calls “custom experiences”: during the events polls, predictions and video highlights are offered through tagging.

With the launch of an initiative called FoxNow, created by Fox Broadcasting Company in partnership with a firm called Watchwith, Shazam along with three other launch partners will provide second-screen apps companies with extra material to synchronize with shows as they air. This will offer yet another medium, for example: turning your iPad into a second monitor, which will then boost revenue for Shazam and other apps that brands pay to make their TV advertisements interactive. Shazam is also expected to release a new version of its iPad and Android tablet apps in the coming weeks; the music service company is looking to build off the tablet option, making second-screen advertising an even larger business than its current one.